Thursday, December 18, 2008

GM + Chrysler = TBTF

WSJ is reporting that GM and Chrysler have gone back to the table to discuss their long-awaited merger. There is no reason for this merger not to happen. An obvious issue though is the fact that both are running out of cash short term and a merger won't help that.

The genius of the move at this point is a little more subtle. The government's reticence to give them bailout money to date may mean that each company individually has not reached too-big-to-fail status. The merger would likely shove them over that goal line.


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